We’ve been singing silver’s praises for a while, as the white metal just doesn’t get the attention and appreciation that its golden brother does. But the potential for price appreciation is often greater for silver than it is for gold. Events last week demonstrated that, as silver took off in a move that investors had been anticipating for a while. Could this be the beginning of silver’s great price breakout?
The story of silver over the past couple months has been one of unreached potential. Despite the ability of silver to outpace gold’s price increases, the slide in industrial demand over the past several months had put a damper on the silver price. The gold to silver price ratio had increased to over 110 to 1, a record high. That meant that silver was far undervalued. And many observers realized that a ratio that high wouldn’t last forever.
It was only a matter of time before the silver price was to start increasing as investor demand picked up, and last week may have been an indicator that demand is starting to increase. Many who have been watching precious metals markets have realized that spot prices have long ceased to correlate to street prices, with metal shortages, closure of mints, and investor flight to safety driving up premiums on coins. But now the spot price seems to be catching up to what markets are actually doing.
The silver price increased over 7% just last week, with significant gains on Friday capping a stellar performance. Safe haven buying buoyed the silver price, and expectations for the future are for further price increases as more and more investors look to take advantage of silver while it’s still affordable.
The gold to silver price ratio has dropped down to 104, which is still high historically, but lower than it has been in a while. And if the ratio drops back down to its long-term historical average of around 60 to 1, silver could nearly double in price. With gold pulling it along as investors flock to safety, 2020 should be a very good year for silver.
Investors now have more options than ever for investing in silver too, with investment vehicles such as a silver IRA being more popular than ever. Just as with a gold IRA, a silver IRA allows investors to invest in physical silver coins and bars while still enjoying the same tax advantages as a normal tax-advantaged retirement account. Investors can even roll over existing assets from a 401(k), 403(b), TSP, IRA, or similar retirement account into a silver IRA without tax consequences.
If you’re looking for an investment that will keep your wealth protected during the upcoming market uncertainty but that will still provide good potential for asset growth, look into starting a silver IRA today.